The US Nasdaq Stock Market has withdrawn its proposed £2.43bn ($4.2bn) bid for the London Stock Exchange (LSE) after the latter rejected its advance.

"Nasdaq announces that it no longer intends to make an offer for the LSE," the US exchange said.

Earlier this month, shares in the LSE jumped by 30% following speculation of a bid war. On Thursday they fell 8%.

Nasdaq's move sparked speculation that the New York Stock Exchange (NYSE) and Euronext would table counter-bids.

The US exchange gave no reasons for the decision to pull its 950p-a-share bid offer, but said that it could return to the bid arena if the LSE's board had a change of heart or if a rival launched an offer.

String of suitors

Nasdaq follows in the footsteps of German rival Deutsche Boerse and Australian bank Macquarie who both withdrew their offers for the LSE after being rejected by its board.